MET - Metlifecare - one for the fundies?

[Balance]

If Beagle thought about $3 was fair value three week's ago for MET compared to MET's sp of $4.20 in 2019, I cannot see how a SP remotely close to 2019's sp could be seen as fair value in today's circumstances. Anything above $3 is based on a lot of optimism regarding the state of NZ's economy and ability to sustain real estate valuations.

Even NZers who are funnelled by the system into owning residential property need income and deposit raising ability to sustain current inflated property prices.

Property prices are going to drop over the next year and half - that's for sure. It's a question of by how much.

MET's last NAB was $7.00 so you can work from there, your downside scenario.

I think 15% is realistic so I get $5.95.

[Beagle]

If Beagle thought about $3 was fair value three week's ago for MET compared to MET's sp of $4.20 in 2019, I cannot see how a SP remotely close to 2019's sp could be seen as fair value in today's circumstances. Anything above $3 is based on a lot of optimism regarding the state of NZ's economy and ability to sustain real estate valuations.

Even NZers who are funnelled by the system into owning residential property need income and deposit raising ability to sustain current inflated property prices.

Go back and read my earlier post today. The last 3 weeks has been an eternity in N.Z. Three weeks ago many thought this virus would become rampant in N.Z. Today we have the real hope we can contain it. Look at the other sector share price movements for the last 3 weeks ! What was missing 3 weeks ago was hope, now we have some. $4.20 was never fair value for MET in 2019...that was the reason I was buying then and that's the reason 3 parties, (that's not a typo, yes three !) were interested in taking it over. You think one or two of those might still be lurking and interested at something bit less than $7 now ?

[Bjauck]

The difference between N.Z. and a lot of other countries is that we have VAST amounts of headroom for helicopter money to deploy and eventually this turns into inflation...that's what you're missing.

Would the NZG be content again to see its helicoptered money inflating residential property values as opposed to rebuilding the economy?

While the virus may not be as devasting as first thought. The productive economic consequences may be worse.

The other parties interested in MET, may find that they have cheaper investment opportunities elsewhere too.

[Balance]

Go back and read my earlier post today. The last 3 weeks has been an eternity in N.Z. Three weeks ago many thought this virus would become rampant in N.Z. Today we have the real hope we can contain it. Look at the other sector share price movements for the last 3 weeks ! What was missing 3 weeks ago was hope, now we have some. $4.20 was never fair value for MET in 2019...that was the reason I was buying then and that's the reason 3 parties, (that's not a typo, yes three !) were interested in taking it over. You think one or two of those might still be lurking and interested at something bit less than $7 now ?

If I am one of them, I reckon a stand in the market today at $5.50 will snare 20% of MET. A distinct possibility.

[Balance]

Would the NZG be content again to see its helicoptered money inflating residential property values as opposed to rebuilding the economy?

Re-inflating residential property is the fastest way of creating 'the feel good wealth and spend more' economic factor.

[Beagle]

Would the NZG be content again to see its helicoptered money inflating residential property values as opposed to rebuilding the economy?

Real estate prices and the health of the N.Z. economy are inextricably linked. I think you'll find little ol N.Z. is one of the safest places in the world to live / retire going forward.
Still over a million ex pats living overseas. You think a few of them might come to the same conclusion ? Demand and supply...think about it !

[bull....]

took my profits this morning thank you mr market

[Bjauck]

Real estate prices and the health of the N.Z. economy are inextricably linked. I think you'll find little ol N.Z. is one of the safest places in the world to live / retire going forward.
Still over a million ex pats living overseas. You think a few of them might come to the same conclusion ? Demand and supply...think about it !

The tourism industry is comparatively more important here, than for many of the countries where ex-pat NZers live - so if unemployment is more of a problem here, those returning from (say) Australia will have to be supported by the dole and that helicopter money. Those returnees may be the ones without the wherewithal to plonk down as a house deposit. However they could boost demand for cheap rental accommodation - some of the excess tourist accommodation could be put to good use.

I would be surprised if housing would re-inflate prior to income sources and the economy being re-established.

I think the high cost of NZ real estate, land and accommodation, whether owner occupied or rental, actually ends up sucking up money that otherwise could go towards other sectors, the productive economy and business.

Increasing real estate prices may produce a feel good factor that may feed back as increased consumer expenditure but this would be more than off-set by the extra deposits and costs needed to buy into the real estate market. Those that have the feel good factor may just end reinvesting in real estate and leading to further real estate inflation.

Just because this government may well have acted in manner that is forestalling the spread of this epidemic, does not necessarily mean that subsequent governments would act similarly with new threats. NZ has an open economy and with many of our people having family overseas and links to other countries.

[King1212]

Did another stab today....jabbb!

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-websit...641/320765.pdf